Industrial Automation Business

[basharath]

Dear All,

We are planning to start a new Automation Business,and i was just thinking to take some tips from the seniors..

As how to bring the new customers as they are already customers of existing companies..
Talents to hire..
If any distributorship or dealership will be better,if so than which brand is preferrable in india.
A wellwisher suggested Siemens dealership ,How is it.?.

Also any other tips which i might have missed asking.

Regards

 

[Aabeck]

How I built up my client base:

I fixed machines for a used machinery builder, quick jobs for free, other jobs for cheap price. This got me in good with him and when any of his customers needed a machine bought from him serviced I got the call. Also if anyone asked him for someone he sent them to me.

Also, I made friends with a salesperson at a local supplier of enclosures and panel items and gave him a few business cards to give to his customers that inquired about someone.

Another thing (especially for new customers) make yourself available anytime they call with an emergency, as they are probably calling around due to their normal serviceperson/company won't respond at 3:00AM

 

[curlyandshemp]

Dear All,

We are planning to start a new Automation Business,and i was just thinking to take some tips from the seniors..

As how to bring the new customers as they are already customers of existing companies..
Talents to hire..
If any distributorship or dealership will be better,if so than which brand is preferrable in india.
A wellwisher suggested Siemens dealership ,How is it.?.

Also any other tips which i might have missed asking.

Regards

some tips that allowed me to build up an automation company that lasted 25 years, 2 recessions and finally sold 2 years ago.

- do not burn any bridges. The people you meet on the way up are the same people you meet on the way down

- do not solicit any former employer's customers, let them come to you

- make yourself available as a sub contractor to larger companies. Larger companies are always 1 or 2 programmers short when they are busy

- attend trade shows and make yourself known

- keep an up to date and active web page

- get your own domain for email

- keep enough money in the bank to last 6 months worth of bills

- stick to what you know best. Do not take on any job that is outside of your expertise

- take advantage of rewards credit cards. Buy everything with the card as long as you can pay off the monthly balance

 

[Tom Jenkins]

It appears that you are thinking in terms of being a distributor or manufacturer's representative.

You need to work with brands that you (or your staff) know and can support for both sales and technical support.

Cash flow is more critical than profit and loss for new businesses.

Most manufacturers expect distributors to purchase some inventory up front. That can put you in a big hole if you aren't well capitalized.

Decide what you will use to differentiate your company from competitors. Great tech support? Big inventory and fast delivery? Personal attention from the sales force? Lowest price?

Have a plan for growth at the very beginning. It won't be 100% right, but it will point you in the direction you want to move.

 

[mk42]

Decide what you will use to differentiate your company from competitors. Great tech support? Big inventory and fast delivery? Personal attention from the sales force? Lowest price?

Definitely want to 2nd this comment. In my opinion, there is usually someone else who can figure out how to beat you on price. That's not really a competition I want to get into. If you aren't focusing on lowest price, you need to be able to quickly and clearly explain to the customer what value they receive from your business. How are you earning the "markup" from the cheapest competitor?

Tom's ideas can all be good options, but the key is convincing the customer how it benefits him.

 

[adisharr]

Also, the lines you will be able to get are going to be second or third-tier brands. It's extremely difficult to get a good line. If you manage to, be prepared to share it with quite a few other distributors in your area. Only the biggest distributors get the big exclusive lines.

Find out if they have any existing sales in the area, how many current distributors there are, typical markets, etc..

A key is to find out if any existing sales are direct and what factors determine if an account would be direct or not. If they are going to take all the big opportunities, forget it. Remember, they need you as well.

 

[Stephen Luft]

Greetings,

Before you start your business, because it sounds like you are in the very early stages, develop a business plan. This document will outline what your business will be. If you are going to be a distributor, define that in your business plan.

Once you have developed it, stick to the plan.

Many of the things that Tom Jenkins outlined are things that you should incorporate into your plan.

You don't want to start a business with any idea of what the business is going to be. If there is no plan to start with it would be like going on a trip and not knowing where your destination is. Without a plan you have the potential to go all over the place and lose focus on the reason(s) you are starting your business and the strengths you are looking to utilize in developing a successful business.

For any new business, customer acquisition will be your first initial challenge. Managing cash flow will be a day to day task that will require your ongoing attention.

Ask yourself, "going into business, why would someone do business with us, compared to our competitor?" Can you validate your business to potential customers. Keep in mind if you focus solely on price you will also lose on price. You must offer more than just being the cheapest game in town.

We focused on synergies with the companies we distribute.

 

[trentg@felixconstruc]

This may sound a bit silly, but know why YOU are starting a business. If you are hoping for more free time, more money and/or more professional freedoms get a better job. As a sole-proprietor in this industry (no longer my primary income, had to find work w/ benefits) I constantly found myself either working 18+ hour days or frantically hunting for work. The "free time" between jobs was the absolute worst time for me. I always felt like I could do more, sell more, send more advertisements... did I mention sell more.

The two things that stand out to me right now that I will do different when I eventually re-open are; Hire a dedicated Salesperson - The lull after completing a job is stressful and can be financially straining. A good salesperson will keep you in consistent work and earn his salary. Second, it is not enough to have 6 months worth of income saved, establish resources for funding jobs prior to opening your doors. There are very few things that suck more than having to turn down a job because you can't financially outlast the duration of the job or you can't fund the hardware for a job. Depending on the industry you target to service (water/waste water) the integrator is often expected to fund instrumentation and controls hardware/software. A medium sized WWTP can require $100K+ in transmitters, PLC's, software, licenses and such. You don't want to give this part of the job away either, a meager 2% mark up on large hardware purchases can supplement your bid and/or your check depending on how you appropriate the 2%.

With all that said though, there is not much more satisfying than completing a project and handing over the O&M's and final invoice.

 

[PLC GURU]

what trentg said...ditto all the way. (Im still doing it)
feast or famine...

 

[basharath]

Thanks a lot for all the beneficial tips.Most of the tips i will incorporate in my business plan.

Thanks Curly for explaining the whole business in a concise way.

Basically We are planning to take two dealerships

Siemens for customers who care for quality and not the cost.For this We met Siemens Guy,and he showed a path of 6 months probation period and then 30,000 USD Deposit.

Another brand Like Delta/Fatek...Etc for customers seeking a cost effective solution.

working like a free lancer will be good in terms of no pressure from manufacturing company,However it will leave us Jack of all master of none.

My focus is with in Six Months Need to touch the Break even.

Again Thanks for your tips.